WB boosts assistance for emerging countries affected by Eurozone crisis

DUSHANBE, January 31, 2012, Asia-Plus -- The World Bank Group announced that it is making $27 billion in funding available over the next two years for countries of Emerging Europe and Central Asia (ECA) impacted by the Eurozone crisis, press release issued by the Word Bank on January 25 said.

“While the effects of the Eurozone crisis on the largest economies of Western Europe receive most of the world's attention, the crisis is also hurting people in emerging Eastern European countries, particularly the poorest in Central and Southeastern Europe,” said World Bank President Robert B. Zoellick.  “The World Bank Group is expanding funding available to the region so that those countries can rely on these resources to weather the crisis.”

According to the press release, the Eurozone debt crisis is harming the ECA region through three channels – finance, trade, and workers’ remittances – and the importance of each channel depends on the individual characteristics of the countries.

“Because of their close links with the Eurozone, countries in Central and Southeastern Europe are likely to face an economic slowdown in 2012,” said Philippe Le Houerou, Vice President for Emerging Europe and Central Asia at the World Bank.  “The Bank’s additional assistance will help countries maintain a sound macro-fiscal framework, pursue needed structural reforms, ensure flow of credit to small- and medium-enterprises, and protect the most vulnerable parts of the population through stronger and better targeted social safety nets.”

The World Bank Group response in the ECA region will focus on: 1) structural reforms and support for the private sector to keep investment, incomes, and jobs growing; 2) advisory and financial support to countries with fragile banking systems; and 3) protection of the most vulnerable through strengthening social safety nets.